Tax and Spend?

Tax Avoidance is the issue of the moment with the government and opposition alike (containing, as they do, numerous wealthy individuals involved with dubious tax avoidance schemes) gratefully grasping the opportunity to blame the nation’s ills on comedians and Take That. Except, of course, when David Cameron is calling upon wealthy Frenchmen to bring their fortunes to Britain and engage in a bit of, well, Tax Avoidance. So, it’s okay sometimes, Dave? Oh, and what about those dodgy deals being cut with tax-dodging corporations, giving away millions in unclaimed tax? Is that okay, Dave?

Now, the thing to bear in mind is that Tax Avoidance is not the same thing as the similarly-named Tax Evasion. The latter is about breaking the law to avoid paying tax due, which, whatever you may feel about tax, is a crime. (Withholding tax over a principle is a different thing again, being a protest – the demand itself is not denied nor is false information supplied, part or the whole of the amount is disputed.) No, Tax Avoidance is about just that – legally avoiding paying a tax that you don’t have to pay. Many exceptions are deliberate creations of government to encourage certain types of behaviour and if an unintended loophole exists, rather than moralising about someone taking advantage of it, it should be closed – which is exactly what has happened to so many.

Yes, there is the problem that Tax Avoidance does favour the rich. For a start, being rich means that they have money to save. Too often, the poor seldom have any left over after the paying the bills to set aside, and, for the poorest, the system often penalises saving (as it does pay rises) by stripping away benefits or taxing at higher rates so that any advantage is stripped away. But, that, in itself, is no excuse for displays of faux morality – wealth and poverty, in themselves, are not morale states. It is possible to achieve through immoral and illegal actions, yes, but it can also be achieved through hard work and prudent saving and those people do not deserve to be hammered. Likewise, whilst the lot of the poor mostly derives from circumstance, there are those who do fulfil the stereotype of laziness and fecklessness so beloved of commentators and that latter sort do not deserve any sympathy.

Equally, the wealthy have the money to afford the accountants, lawyers and financial advisers necessary to find the loopholes and exceptions that allow them to avoid paying excessive tax. It isn’t fair that a poor person with a small amount of savings or someone whose wage is just high enough to take them into a higher tax band without being high enough to profit after tax are not well-placed to receive the advice needed to better their financial position. But, that is not the fault of those with money, it is the fault of over-complicated and unfair tax law. Yes, there are doubtless members of a wealthy elite who are involved in crafting these laws in order to maintain a position of dominance over the rest of us (they go by the name of the government and Civil Service), but they do not include comedians and singers in their ranks. Strangely enough, the very people baying the loudest are those who are responsible for the situation and taking advantage of loopholes to protect their own undeserved fortunes (no wonder such loopholes exist!). How they must be laughing in private at the storm deflecting attention away from their own mendacity….

The issue of Tax Avoidance, like so many in modern British politics, is a smokescreen. The problem is not that there are rich and poor, nor that some people would rather not pay taxes they aren’t obliged to – it isn’t even that there are loopholes, as they can always be closed and some exist for a good reason. The problem is that British taxes are just too high and the British tax system is an arcane morass of confusing and unjust laws administered by, perhaps, the most incompetent body ever to exist.

If high taxes were reflected in the quality of life we received in return – such as a well-funded NHS, quality policing, hard-working MPs, a sensible judiciary, regular rubbish collection, decent education, equitable benefits, job creation and retention, and maybe more than a handful of troops for our defence – then high taxes would be justified. Unfortunately, they are not. The NHS is haemorrhaging money and run by fools, the police are pared to the bone, MPS are corrupt and lazy, the judiciary is, well, the judiciary, rubbish collections grow fewer and fewer, education has been a bad joke for decades, benefits are in a complete mess, jobs are not being created nor sustained, and we’ll be lucky if the military has someone to answer the phone and say nothing is available if a war comes along. And, yet, taxes keep on rising and the government keeps demanding more. They cut services, but they cannot seem to cut expenditure, let alone cut taxation. Too much is frittered away on waste and on pointless or badly-managed projects, with the remainder going into the pockets of fraudsters. Britain is a third world country with first-world taxes. If money is short, politicians should be looking to sorting the system out, not attempting to find more cash to tip into the bottomless hole of waste.

Naturally, the government wants to raise taxes as it gives them more money to play with, more power to boost their egos and greater opportunity for it to disappear into their bank accounts via dodgy expenses claims and funnelling it to friends and family for spurious projects. Because the money is not their own, nobody at any level in government or the Civil Service cares about it is spent. They do not have pride in their work and so are not prudent with the money that they have taken in tax. When it falls short through their own wastefulness they demand more and pout with an expression of morale disgust when someone isn’t keen to hand it over. Where were their morals when they were managing our money?

A simpler, fairer and lower tax system managed by competent people would benefit everyone, rich and poor. Turning the screw will only serve to drive the wealthy from Britain and stifle business – and without the wealthy and businesses providing the necessary capital for job creation and retention, everyone else will suffer. And, if there are more people out of work, that means even fewer taxes and a rise in the benefits bill, draining yet more out of a dwindling income. You do not need to be an economic genius to see that unbridled taxation and the politics of envy will do nobody any good. Unfortunately, it seems many in positions of influence are economic idiots. Whatever the rhetoric they use to deflect attention, their actions will eventually penalise the poor more than the wealthy. After all, the rich have the money to escape a failing country – the poor do not.

The trend in government has always been to raise more taxes and it has yet to do the country any good. Where there is a short-term necessity, it is always used as the backdoor to long-term penalty. Repeating the same failed course will repeat the mistakes of the past. We need new thinking. We need a government out for more than its own self-aggrandisement. We need a government that will take real responsibility. Will we get it?